Senate Majority Leader Reid said today he would drop a cram-down provision from a House-passed banking bill if the language threatened to keep the Senate from passing the overall bill. The provision would allow a bankruptcy judge to reduce a homeowner’s mortgage principal. “If we can’t get the votes for that, and I am hopeful we can — I am semiconfident we can — then what I’ll do is take that off [the bill] and do the other banking provisions,” Reid said at a Christian Science Monitor breakfast. Reid said he would work to keep the package intact, but raising the prospect of pulling the provision seemed to acknowledge assertions by Sen. Evan Bayh, D-Ind., and others that the cram-down bill cannot pass due to opposition from Republicans and some Democratic moderates.

Apparently, the “compromise” is to only apply cramdown to subprime mortgages, which sounds terrific, right? Except, as Kagro points out here, most of the subprime mortgages have already defaulted. So that’s all over. The big money boyz don’t want regular qualified borrowers who are caught up in the recessionary blowback of unemployment and soaring uncovered health care costs to be able to renegotiate mortgages through bankruptcy. Moral hazard, dontcha know. Because, gawd knows, these lending institutions are all about morality.

Now, I don’t think it’s wrong to compromise. Nor do I hereby anoint the cramdown provision with perfection and holiness. No, I don’t think that Obama walks on water, and no, I don’t think that every proposal to issue forth from his saintly lips is heavenly gospel. What I do find concerning, however, is that the Conservadems are already, after only two months into a new administration, threatening to sink major parts of Obama’s legislation at the behest of the Republicans. This is exactly what they did to the Clinton health care plan in 1993 and how the abomination of “Don’t Ask, Don’t Tell” was created.

Update 2: More evidence supporting my conclusion that Harry Reid is a tool:

Senate Majority Leader Harry Reid said Friday that John Roberts misled the Senate during his confirmation hearings by pretending to be a moderate – and that the United States is now “stuck” with him as chief justice.

Seriously? Little, delicate Harry Reid was waylaid and bamboozled on the plantation by the fast-talkin’ Salesman Roberts from the Big City who, with his fancy words, did force — force, I say! — Mr. Reid to part with his cherished, and often-clutched, pearls? I declare!

Ah yes, no one could have predicted…. Please. The Senate isn’t the most discerning bunch of people in the world, but it was pretty clear to all that Roberts was strongly conservative.

Anyway, what really bothers me about Reid’s comments is that they reinforce the idea that confirmation hearings matters. They don’t — and we’d all probably be better off ignoring them entirely.

Reid is suggesting that Senators based their vote on what Roberts said during the confirmation hearings. Again, I’m just hoping that’s BS, because the alternative (that Senators actually voted based on his confirmation promises) is pretty depressing.

I'm not sure why you think it's "at the behest of Republicans" — might some moderate Dems actually agree with Republicans on some issues or represent constituencies (raises own hand) who do?

Don't Ask Don't Tell is clearly bad policy, but it was at least better than the status quo of the time (gays couldn't serve). But yeah you can blame the more socially conservative Dems for this. I trust their horizons have expanded a bit since the early 90's.

Ditching the poorly-conceived and executed Clinton health plan was a good decision from where I'm sitting. I'm not a fan of Obama's plan either but he's going about it in a better way and at least has a mandate to do it. Clinton didn't.

There's little anyone could have done to prevent Robert's confirmation since he was so obviously brilliant. My takeaway from Reid's recent comments on Roberts is that he's trying to frame the process for Obama's appointments to be seen as less ideologically driven.

For info on why cramdowns are a bad idea I'll direct you to Megan McArdle:

fair points all around. "at the behest of the Republicans" was probably inapt. i probably meant "at the behest of the corporate special interests lobbying to maintain the status quo ante". i honestly don't believe that there are that many politicians in washington who really want change. lobbying culture has grown to the point where most politicians are more worried with protecting their backside than fighting for ordinary americans.

as to don't ask, don't tell, many studies show that gays serving in the military were targeted more frequently as a result of the policy. real people, with real lives and real families suffered as a result of incremantalist accomodationalism.

as for health care, we absolutely needed then, and we absolutely need now, a national health care system that covers every american. again, these are real people, with real lives, and real families who are being maimed and killed in this country every year as a result of undercoverage and lack of coverage. it is an absolute travesty that we are the only western democracy without national healthcare coverage. and it is just as shameful that we are the only developed country in which tens of thousands of people every year declare bankruptcy and lose their homes because of medical costs. i don't care how it gets done but it needs to get done. again, it was the accomodationalist moderates in the democratic party who killed health care reform, at the behest of the entrenched interests who lobbied rapaciously for the plan's failure.

at this point, the country needs radical change in a number of important areas. doing nothing is not an option. doing just a little bit here and a little bit there is not an option. the last 8 years of wide-ranging neglect under the bush administration and his republican and democrat enablers can no longer stand. we are in too deep, and our situation is far too dire, to let the campaign-contribution-laden voices of the status quo in congress succeed again in cravenly shutting down any attempts to fix the system that is so drastically broken.

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